Questions from General Taxation

Q: William is not married, nor does he have any dependents.

William is not married, nor does he have any dependents. He does not itemize deductions. His taxable income for 2017 was $87,000. His AMT adjustments totaled $125,000 (with the exception of the standa...

Q: Herbie is the owner of two apartment buildings. Following is information

Herbie is the owner of two apartment buildings. Following is information related to the two buildings: Date Acquired Total Cost Cost Allocated to Land  Building A 3/15/97 $300,000 $40,000 ...

Q: Clay Company uses the completed contract method on a contract that requires

Clay Company uses the completed contract method on a contract that requires 14 months to complete. The contract is for $750,000, and has estimated costs of $425,000. At the end of 2017, $210,000 of th...

Q: Julia acquired passive Activity A in January 2013 and passive Activity B

Julia acquired passive Activity A in January 2013 and passive Activity B in July 2014. Until 2016, Activity A was profitable. Activity A produced a loss of $150,000 in 2016 and a loss of $150,000 in 2...

Q: Benny sells an apartment building. His adjusted basis for regular income

Benny sells an apartment building. His adjusted basis for regular income tax purposes is $450,000, and it is $475,000 for AMT purposes. He receives $700,000 from the sale. a. Calculate Benny’s gain...

Q: Cindy, Casey, and Kara each invested $30,000

Cindy, Casey, and Kara each invested $30,000 in a real estate venture. The partnership borrowed $200,000 and purchased a warehouse for $290,000. The note was secured by the building; there was no pers...

Q: Kim owns equipment that is used exclusively in her business. The

Kim owns equipment that is used exclusively in her business. The equipment has an adjusted basis of $8,500 (FMV $5,000). Kim transfers the equipment and $2,000 cash to David for a computer (also used...

Q: Joshua owns undeveloped land that has an adjusted basis of $45

Joshua owns undeveloped land that has an adjusted basis of $45,000. He exchanges it for other undeveloped land with an FMV of $70,000. a. What are his realized and recognized gain or loss on the exch...

Q: Patti’s garage (used to store business property) is destroyed by

Patti’s garage (used to store business property) is destroyed by a fire. She decides not to replace it and uses the insurance proceeds to invest in her business. The garage had an adjusted basis of $5...

Q: Evelyn has rental income of $48,000 and passive income

Evelyn has rental income of $48,000 and passive income of $18,000. She also has $148,000 of losses from a real estate rental activity in which she actively participates. Evelyn’s AGI is $95,000 before...